In addition, the survey suggested that advisors coach their clients on the tools that are available and demonstrate their use during a financial planning appointment to help improve adoption rates.
The tools clients liked and used the most were the simple, straight-forward ones that aided in the core facets of an advisory relationship, the study found, while fancier bells and whistles often were ignored. For example, 69% of clients used communication tools, such as video conferencing and messaging. Account aggregation (66%) and personal goal tracking (65%) were also popular.
When it came to retirement forecasting tools, clients preferred income forecasting (56%) to asset forecasting (49%), which reflects the priority investors place on understanding what their future income will be and the implications that has on their retirement years, the study said.
Not surprisingly, use of specific tools was strongly correlated to the life phase of the client, with budgeting tools being the most popular among 35- to 44-year-olds (76%) and retirement living expenses tools being the most popular with the 55- to 59-year-old set (68%), the study found.
Investment advisors would do well to forgo complexity and embrace simplicity if they’re hoping more clients will use the tools provided to them, as some 85% of clients said they preferred simpler tools that had more integrated features, but not additional features.
The study had the following recommendations for advisors looking to upgrade their digital offerings:
- Simplify the digital experience by removing seldom-use features, or moving them to a “power use” version.
- Redesign the remaining features with ease of navigation in mind.
- Eliminate the need for users to input the same information multiple times across different platforms.
- Offer short-form content and info-graphics over research reports with longer narratives.
- Stream users by life-stage so that their features of interest and more personalized content pop up first.
The last point, the advisors surveyed said, may be easier said than done. Only 39% of them said they found it very easy to personalize the content they pushed out to their clients, and even fewer found it easy to personalize the format of that delivery, and yet 70% of clients wanted that personalization.
The advantage in the tech-tool race goes to the larger firm with the scale and budgets to produce content in multiple formats and create systems that allow their clients to choose how they wish to receive information, the study said.
“The investment in technology is the fastest growing expense for wealth management firms. Growing at 10-20% per year across the industry. So very fast paced and they’re spending huge amounts,” Keuls said. “The challenge is for the medium-size and smaller firms, who don’t have the scale to make the investments that a Morgan Stanley can in these platforms. So you can say they’re spending more than they can afford, but it still may not be enough.”